Chinese firm sues Venezuela as crisis tests ally's patience

CARACAS, Venezuela (AP) — One of China's biggest state-run
conglomerates has sued a Venezuelan counterpart in a U.S. court
in a dispute over unpaid bills, a sign of Beijing's growing
impatience with its socialist South American ally as it slides
into bankruptcy.

In the lawsuit filed Nov. 27 in a Houston federal court, a U.S.
subsidiary of Sinopec sought more than $23 million in damages
from Venezuela's state-run oil company, PDVSA. Sinopec alleges it
never received full payment for 45,000 tons of steel rebar it
agreed to sell PDVSA for $43 million and which was delivered in
2013.

The lawsuit, while small in size, says PDVSA through its U.S.
subsidiary Bariven reneged on repeated promises to pay Sinopec,
at one point costing the Chinese company $2 million in losses
after it entered into arbitration with a supplier it agreed to
purchase the steel from to carry out the deal.

"This is not simply a case of a broken promise to pay," Sinopec
said in the court documents, accusing PDVSA of "deceit" and
"willful deception" in its refusal to pay its bills. "Rather,
this case involves a complex commercial transaction specifically
calculated to leave Sinopec without a remedy."

The Chinese "usually take a more diplomatic tone" and are clearly
angry, Russ Dallen, head of local brokerage Caracas Capital,
wrote in a report Wednesday in which he revealed the existence of
the lawsuit.

The dispute comes as Venezuela is seeking fresh financing to
restructure its huge foreign debt on which it is behind payment.

China has been one of Venezuela's biggest creditors, providing it
loans, cash and investment totaling more than $65 billion between
2007 and 2016, according to a database maintained by Boston
University and the Inter-American Dialogue. But it has so far
failed to come to President Nicolas Maduro's rescue as he tries
to shield the OPEC nation from triple-digit inflation,
fast-declining oil production and financial sanctions imposed by
the Trump administration.

A spokesman for Beijing-based Sinopec Group confirmed that a U.S.
subsidiary of a Sinopec trading company had launched a lawsuit
against PDVSA about "a dispute over payment owed."

"As a big company, it is normal for us to have such commercial
dispute and it is normal to resort to law if there is a dispute,"
Sinopec spokesman Lu Dapeng said by phone.

Geng Shuang, a spokesman of China's Foreign Ministry, said the
issue was nothing more than a regular commercial dispute and that
China remains willing to cooperate with Venezuela on an equal and
mutually beneficial basis.

"I think this is a common commercial dispute and there is no need
to make over-interpretations of it," Geng said. "I want to stress
that China attaches great importance to the development of China
Venezuela relations."

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Chinese firm sues Venezuela as crisis tests ally's patience

CARACAS, Venezuela (AP) — One of China's biggest state-run conglomerates has sued a Venezuelan counterpart in a U.S. court in a dispute over unpaid bills, a sign of Beijing's growing impatience with its socialist South American ally as it slides into bankruptcy.